Bank Failure Fallout: A Risk Management Checklist for Institutions

ALM Strategy | Liquidity | ALCO | MRM

The Darling Consulting Group team has been in contact with hundreds of banks and credit unions since the bank failure situation unfolded rapidly in March – and as it continues play out, contributing to widespread fear. Clearly, there were risk management processes that could have been improved. We have been assessing (and as news breaks, reassessing) the situation with our typical ALCO focus in mind: thoughtfully exploring risk/return tradeoffs of potential strategic options to better position our clients to optimize income safely and soundly.

To this end, institutions may consider a range of options that are specific to their individual business models and balance sheet profiles. Below we highlight additional actions that may be more widely applicable to all institutions.